EFFECTS OF COVID-19 GLOBAL OUTBREAK ON RENEWABLE ENERGY RESOURCES SUPPORT MECHANISM IN TURKEY

Introduction

It is a worldwide accepted opinion that the use of renewable energy resources will provide significant benefits in many areas from national income to employment, from investment areas to environmental factors, from energy supply and security to resource diversification. Considering all these, especially in developed countries, we have started to move towards environmentally friendly, clean and relatively cheap energy sources, and as a result, steps have been taken to use more renewable energy sources for sustainable and clean energy production from sources available all over the world.

In this context, in order to expand the use of renewable energy sources for electrical energy production in our country, to bring these resources to the economy in a reliable, economical and quality manner, to increase resource diversity, to decrease greenhouse gas emissions, to evaluate waste and to protect the environment, the Law on the Utilization of Renewable Energy Resources for the Purpose of Generating Electric Energy (“Law”) was prepared and entered into force on 18.05.2005.

Renewable Energy Resources Support Mechanism (YEKDEM)

Renewable energy sources in the Law are defined as non-fossil energy sources such as hydro-electric, wind, solar, geothermal, biomass, biogas, wave, flow energy and tidal. Under Article 5 of the Law, for the determination and monitoring of the type of source in the purchase and sale of electricity generated from renewable energy sources in the domestic and international markets, it is stated that the procedures and principles regarding the “Renewable Energy Resource Certificate” (“YEK Certificate”), which are set forth to be issued by Energy Market Regulatory Authority (EMRA) to the generation licensees, will be regulated by a regulation.

The Regulation on the Certification and Support of Renewable Energy Resources (“Regulation”) prepared on the basis of Articles 5 and the following articles of the Law was published in the Official Gazette dated 01.10.2013.

The support mechanism, which includes the procedures and principles regarding the prices, times and payments to be made to the legal entities holding generation activities based on the renewable energy sources within the scope of the Regulation on Unlicensed Electricity Generation in the Electricity Market, through the supply companies in their regions, and who are producing renewable energy sources within the scope of the Regulation, is defined as Renewable Energy Resources Support Mechanism (YEKDEM). Through the YEKDEM mechanism, a minimum price application and a 10-year purchase guarantee are provided about the investments to be made for the production of electricity from renewable energy sources, thereby aiming to encourage production and support the investor.

According to the Decision of the Council of Ministers dated 18.11.2013 and numbered 2013/5625 (“Decision”), published on the basis of the authority granted in Article 6 of the Law, it is envisaged to provide YEKDEM support to the generation facilities, that put into operation or will be operational until 31.12.2020 and within the scope of the Law, for a period of 10 years. In this context, 13.3 USD-cent / kWh purchase guarantee is given to biomass-based production facilities, 7.3 USD-cent /kWh for hydroelectric power plants, 7.3 USD-cent / kWh for wind power plants, 10.5 USD-cent /kWh for geothermal power plants and 13.3 US dollars/cent /kWh to solar power plants that will benefit from YEKDEM support.

According to the current regulations, the most important condition to be met to benefit from the YEKDEM is that the facilities aiming to generate electricity from renewable energy sources were put into operation until 31.12.2020 at the latest.

On the other hand, according to Article 6 of the Law, those who want to be subject to YEKDEM in the next calendar year must also obtain YEK Certificate and apply to EMRA until October 31.

Coronavirus (Covid – 19) Epidemic and Force Majeure Concept

The deadly coronavirus (Covid-19) outbreak that occurred in Wuhan, China in December 2019 and rapidly influenced the whole world has reached a global dimension and unfortunately it has started to spread by showing its effect in our country. Individual and social isolation measures are taken by many authorities and organizations, including the Presidency, the Ministry of Health and the Ministry of Internal Affairs, to control the coronavirus outbreak in our country, with the least damage. The studies carried out to make our country among the countries that are least affected by this global problem are continuing with great care.  In this context, all flights to or from abroad will be stopped, many domestic flights will be restricted, many previously planned international sector activities have been cancelled or postponed, consequently, the coronavirus outbreak has adversely affected many sectors and economies, including the energy sector. Whether further measures will be taken to prevent the spread of this epidemic will be shaped in the coming days, and even in the current situation, it is undisputed that there are serious problems in the global supply chains and production in the energy sector. In this context, there are problems in transportation and logistics services in the supply of many equipment or modules to be used in generation. For example, most of the turbine providers in wind power plants work with manufacturers in Europe and China, and it is clear that delays due to the epidemic in these regions will disrupt projects. Likewise, the raw materials and auxiliary materials of many modules used in solar power plants are supplied from China and there are serious delays in the network connections of the projects due to the restrictions in this period.

Undoubtedly, the deadly spreading coronavirus outbreak threatening the whole world and our country is legally a force majeure. For, as stated in the Supreme Court decisions, the force majeure refers to an extraordinary event that occurs outside the responsible and debtor’s activity and operation, which causes the violation of a general norm or debt in an absolute and inevitable manner, which cannot be foreseen and resisted; natural disasters such as earthquake, flood, fire, epidemic disease are considered as force majeure. The deadly coronavirus epidemic that affects the whole world is also accepted globally that it must be considered as a force majeure legally.

On the other hand, in order to be regarded as a force majeure event in article 35 of the Electricity Market License Regulation; although the affected party has taken the necessary care and attention and took all precautions, the incident should not be prevented, avoided and predicted, and this situation should prevent the affected party from fulfilling its obligations under the relevant legislation, and it is clearly stated that there are epidemic diseases among the situations that can be accepted as force majeure. Therefore, it is indisputable that the coronavirus epidemic, which negatively affected all sectors in our country, should be accepted as a force majeure in the energy sector.

Conditions to Extend the Period to Benefit from the Existing YEKDEM

In order to prevent the negative effects of the coronavirus epidemic, which is a force majeure, on the facilities aiming to generate electricity from renewable energy sources, the President has the power to take a decision to extend the date of 31.12.2020, which is envisaged for the commissioning of the generation facilities that can benefit from YEKDEM.

However, in case there is no decision to extend this period, is it possible for rightholders to request time extension based on force majeure?

With a petition to be submitted to the Ministry of Energy and Natural Resources at this stage, for legal entities holding generation licenses that are estimated to be unable to operate until 31.12.2020 due to the coronavirus outbreak, they have to:

• Apply for force majeure,
• Indicating that the coronavirus epidemic is a force majeure in the application,
• Negative effects of force majeure on business activities and project stages,
• Certification or explanations of why the production facility cannot be put into operation until 31.12.2020,
• After all, due to force majeure, they have to request the extension of the period they are subject to be included in the existing YEKDEM.

If the applications on this issue are rejected by the Ministry of Energy and Natural Resources, it is possible to bring the matter to the administrative jurisdiction.